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Review of Economic Research on Copyright Issues (RERCI)

RERCI Articles

Creativity and the Economics of the Copyright Controversy

Review of Economic Research on Copyright Issues, Vol. 6, No. 2, 5-12, 2009

Harold Demsetz

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Abstract

The debate about copyright law centers on the apparent tradeoff between the creation of new works and the extent to which these works are used once they are created. Economics has been employed explicitly and implicitly to bolster positions taken by those involved in this debate. I do not directly join this debate here, but what I will say is relevant to it. My objectives are different, to draw attention to the neglect of creativity by economists and to describe some of the unique problems this neglect poses for those who use traditional economic models to explain and support the positions they take in this debate. It is no intent of mine to discourage the use of traditional economic models but, rather, to urge greater care in their use.

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The Economics of Digital Goods: A Progress Report

Review of Economic Research on Copyright Issues, 13(2), 1-24, 2016

Paul Belleflamme

Downloads:  360


Abstract

I first review the theoretical apparatus that has been largely used so far to analyze information goods industries. I argued then that although this apparatus was fairly appropriate in the analog era and in the early digital era, it now needs to be significantly updated. The advent of streaming challenges indeed the main assumptions that underlie the existing models. This observation leads me to propose two main directions for future research efforts. First, one needs to better understand, and model, how streaming modifies the way content is accessed and consumed. Second, more attention should be given to the roles and strategies of streaming platforms, which become inescapable intermediaries regarding the distribution and consumption of digital goods.

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Forever Minus a Day? Calculating Optimal Copyright Term

Review of Economic Research on Copyright Issues, Vol. 6, No. 1, 35-60, 2009

Rufus Pollock

Downloads:  348


Abstract

The optimal term of copyright has been a matter for extensive debate over the last decade. Based on a novel approach we derive an explicit formula which characterises the optimal term as a function of a few key and, most importantly, empirically-estimable parameters. Using existing data on recordings and books we obtain a point estimate of around 15 years for optimal copyright term with a 99% confidence interval extending up to 38 years. This is substantially shorter than any current copyright term and implies that existing terms are too long.

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Intellectual Property in Software Development: Trends, Strategies and Problems

Review of Economic Research on Copyright Issues, Vol. 4, No. 1, 15-25, 2007

Knut Blind

Downloads:  336


Abstract

This paper analyses the impacts of the recent discussion to extend patentability to computer-implemented inventions, i.e. to allow software patents, in Europe. Based on two surveys among the German software sector referring to the use and importance of IPR in the year 2000 and 2004, the analysis finds that the share of companies using patents in the software sector remains constant, but the relevance of this instrument increased significantly for the active users of patents. Based on a set of hypotheses on the determinants for the use of patents, we also find changes. The size bias of patent use increased, whereas there is a dichotomy between using patents and following the open source model in the software sector and not a convergence, as has been suggested by the anecdotal evidence of some large multinationals. These changes in the software sector generate several new challenges for policy makers responsible for the IPR regime relevant for software in addition to the still unsolved question of extending patentability to software in Europe.

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Fair Copyright Remuneration: The Case of Music Radio

Review of Economic Research on Copyright Issues, Vol. 7, No. 2, 21-37, 2010

Richard Watt

Downloads:  336


Abstract

The issue of what price should be set for the music input to radio broadcasts has been hotly debated recently in several countries, including USA, Canada and New Zealand. Since music is subject to copyright, this is an issue that is of great importance to the economics of copyright. The central point is the fact that, because of the economic efficiency that is gained by collective management and blanket licencing, the copyright holders in music are represented by a single bargaining unit. The ensuing monopoly power is often seen to be detrimental to social efficiency, and so in exchange for allowing the collective to form and operate, the price at which it grants access to its repertory is regulated. The regulated price should be set at a fair and equitable level. In this paper, the Shapley methodology is used to attempt to provide such a tariff.

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Piracy and the Demand for Films: Analysis of Piracy Behavior in French Universities

Review of Economic Research on Copyright Issues, Vol. 3, No. 2, 15-27, 2006

David Bounie, Patrick Waelbroeck and Marc Bourreau

Downloads:  325


Abstract

The purpose of this article is to identify which, if any, segments of the movie business have suffered from digital piracy. We use a sample of 620 university members including undergraduate students, graduate students and professors to assess the effect of digital piracy on legal demand. A large percentage of respondents get pirated movies from a variety of channels (on P2P networks, intranet, by physical means. . . ). Surprisingly, approximately one third of the pirates declared that watching pirated movies increased their demand for films (for instance, it led them to rent or purchase videos that they would not have rented or purchased otherwise). Using regressions analysis, we find no impact of piracy on theater attendance, and a strong impact on video rentals and purchases. However, movie piracy has no impact on video rentals for respondents who use pre-paid pricing schemes at video-stores.

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A Taxonomy of Empirical Research on Copyright - How Do We Inform Policy?

Review of Economic Research on Copyright Issues, Vol. 9, No. 1, 47-92, 2012

Christian Handke

Downloads:  318


Abstract

This paper summarizes key results in the empirical literature on unauthorized copying and copyright, and puts them into context. Casting the net more widely than previous surveys, it highlights noteworthy gaps and contradictions in the literature. There is initial evidence, for example, that the economic effects of digital copying vary between different industries, but these differences are not yet well understood. Most importantly, the empirical literature is unbalanced. The bulk of econometric research has focused on unauthorized copying and rights holder revenues. Little is known about the implications for user welfare, for the supply of copyright works, or about the costs of running a copyright system - and the preliminary evidence is often quite surprising. Much work on these issues remains to arrive at reasonable implications for copyright policy.

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The Four P's of Digital Distribution in the Internet Era: Piracy, Pie-Splitting, and Pipe Control

Review of Economic Research on Copyright Issues, Vol. 7, No. 2, 3-20, 2010

Joel Waldfogel

Downloads:  315


Abstract

The first decade of the new millennium has been the decade of digital distribution for media products. All products that can be digitized have either been affected, or will soon be. Since the early days of the Internet, piracy has emerged as an important threat to media firms. But new technology also brings an opportunity for firms to engage in new models of pricing. Many of these new forms of pricing produce revenue that is not readily attributed to particular owners, making it necessary for sellers to create new methods for sharing revenue, or pie-splitting. Affected industries have mobilized to enact a number of non-market responses, including recent efforts to induce Internet Service Providers to control the flow of unpaid content through their pipes. This essay reviews the threats, opportunities, and challenges to media firms that have emerged over the past decade, with attention to piracy, pricing, pie-splitting, and pipe control.

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Copyright in the Digital Age; Benefiting Users and Creators?

Review of Economic Research on Copyright Issues, Vol. 8, No. 2, 55-64, 2011

Peter Jenner

Downloads:  312


Abstract

Copyright is supposed to establish a mechanism under which content users contribute to creators' income, thereby providing incentives for creators to create new and original content for end-users to consume. However, in the current digital environment one can suggest that this arrangement is breaking down. The necessary flow of content is not being achieved in such a manner as to provide a satisfactory flow of revenue back to the creators, or is it vice versa? It can also be argued that the copyright system is not providing enough revenue for distributors to provide the sort of services that users would like with the current pricing structures, use restrictions and rights complexity demanded by the major controllers of music copyrights. In this essay I consider the current state of affairs regarding the copyright system, and its effects for all participants along the value chain for protected content.

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P2P Music Sharing Networks: Why the Legal Fight Against Copiers May Be Inefficient

Review of Economic Research on Copyright Issues, Vol. 2, No. 2, 69-82, 2005

Fabrice Rochelandet and Fabrice Le Guel

Downloads:  312


Abstract

The paper investigates empirically the behavior of copiers over P2P networks based on an ordered Logit model of intensity using a dataset collected from more than 2,500 French households. In accordance with the prediction of the Beckerian framework, copying behavior is negatively correlated with the willingness to pay for an original when a copy is available. But individuals also make their decisions according to their social neighborhood and to the degree to which they have learned about copying. Furthermore, we find that copiers are motivated by the search for diversified contents, and they are also very concerned about the interests of artists. We then consider the efficiency of anti-copying policies on the copying of music and movies.

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Patent and/or Copyright for Software: What Has Been Done So Far?

Review of Economic Research on Copyright Issues, Vol. 4, No. 1, 3-14, 2007

Richard Watt

Downloads:  309


Abstract

The particular case of software seems to have stretched the patent-copyright divide to the point of breakage. Inspite of being traditionally excluded from patent, software is an obvious case of a single creation that embodies both expression and innovation, and so strong arguments exist for software to be both copyrightable and patentable material. The legal profession has looked carefully at the patentability of software over the past 15 years or so, both from a fully legal perspective, and using economic-type arguments. But we are still waiting for the economics profession per sé to set to work on this issue. Here, I shall go through some of the most well known arguments surrounding the protection of software, and then put forward a personal opinion as to what theoretical economists are likely to add, if and when they include this important question on their research agendas.

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The End of Copyright History?

Review of Economic Research on Copyright Issues, Vol. 1, No. 2, 5-10, 2004

Paul A. David

Downloads:  289


Abstract

The history of the copyright system appears to be approaching an end. A pressing question now is whether or not the particular manner of its passing will be one that proves seriously destructive for cultural vitality and the advancement of knowledge.

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The Economic Effects of Digitization on the Administration of Musical Copyrights

Review of Economic Research on Copyright Issues, 10(2), 55-67, 2013

Ruth Towse

Downloads:  273


Abstract

Digitization has had a profound effect on the management of musical copyrights in terms of data requirements and has vastly increased the volume of transactions: both impacts have raised net costs of administration to collecting societies. This paper explores these points using information provided by PRS for Music, the UK's collecting society managing musical rights and considers them in the wider context of moves on the political front to increase competition in rights management as well as to promote multi-territorial licensing within the EU. An important question for economists is whether the natural monopoly argument for single national collective rights management using blanket licensing still holds up with digitization of music and management of musical rights. This paper suggests that collaborative concentration may be preferable to competition.

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Decreasing Copyright Enforcement Costs: The Scope of a Graduated Response

Review of Economic Research on Copyright Issues, Vol. 6, No. 2, 13-29, 2009

Olivier Bomsel and Heritiana Ranaivoson

Downloads:  261


Abstract

The digitization of copyrighted goods and the dematerialization of their distribution over the Internet have caused a weakening of copyright, a key institution of the creative industries. One reason is that, during the broadband roll-out, copyright enforcement costs have become superior to the estimated benefits of copyright. This paper analyses the causes of this situation and suggests how a graduated response to infringers can decrease copyright enforcement costs.
The paper starts with a review of the economic literature on copyright that focuses on its industrial aspects. It then analyses how, all along the distribution vertical chain, the consumer's impunity provides incentives to free ride on copyright, which rapidly increases copyright enforcement costs. It finally depicts the graduated response mechanism and the voluntary agreement that initiated this system in France. In conclusion, the increase in the cost of free-riding for the final consumer should lead to a decrease in copyright enforcement costs and to higher returns in the creative industries.

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Digital File Sharing and the Music Industry: Was There a Substitution Effect?

Review of Economic Research on Copyright Issues, Vol. 2, No. 2, 41-52, 2005

Norbert J. Michel

Downloads:  258


Abstract

Several empirical studies exist that measure the impact of filesharing services on music sales, and most suggest that there was a negative impact on sales. Still, most of these studies do not examine (at the household level) whether consumers substituted out of music and into movies. This paper uses micro-level data from the Consumer Expenditure Survey (1998 through 2003) to test for this possible substitution effect. The data do not support the hypothesis that music consumers spent less on music because they spent more on either movie tickets or prerecorded movies (purchases or rentals).

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